Declare bank charges unfair
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| Man with cash (c) Rex |
Whether your bank account occasionally drifts into the red or you’re often overdrawn, compare the accounts with the best deals on overdrafts - even before the courts decide whether the charges are unfair
It seems many bank customers don’t realise the true cost of going overdrawn, particularly if they haven’t arranged these facilities with their bank in advance.
There might be ongoing legal action to determine whether many of the overdraft charges levied by banks are fair, but although the initial ruling went against the banks, experts say the case is far from over.
It could take years, even if the case eventually goes against the banks, before people get the charges refunded.
In the meantime you should look to reduce banking costs by shopping around for a better current account deal. For those that regularly use overdraft facilities there are substantial savings to be made.
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Don’t go overboard
As a rule of thumb the newer entrants into this market, Alliance & Leicester, First Direct, Halifax and Abbey tend to offer more competitive packages than the traditional “big four” – Lloyds TSB, Barclays, NatWest and HSBC.
Many of these banks now offer multiple accounts, so if you bank with one of these it’s worth checking whether they have a better-priced deal that suits your circumstances.
The key detail for many people is the authorised overdraft rate.
Even if you only use an overdraft occasionally it makes sense to go for an account with the lowest borrowing charges, and not be sidetracked by tempting interest rates offers on credit balances.
